Market Commentary

March commentary

Share markets struggled for air in March as trumped-up tariff talk hung like the sword of Damocles over a considerable chunk of the global economy.

US equities bore the brunt of the sell-off as the growing likelihood of an all-out trade war reignited recession speculation, fraying the last nerves of already jittery investors. Despite this, the Trump administration stuck to its guns, announcing a 25% import levy on all cars and car parts not made domestically and promising an equal opportunities approach to reciprocal tariffs – i.e. they’d apply to all nations, not just those with the heftiest trade imbalances.

Meanwhile, the Department of Government Efficiency (DOGE) continued to slash and burn its way through government spending and headcount. While both this and tariffs were well telegraphed policy pledges, the depth, breadth and speed of implementation seemed to blindside almost everyone with skin in the game. US consumers were no exception, with confidence cratering during the month.

We were certainly not immune to the turmoil. Although, if when the US sneezes, the world catches a cold, our share market was probably lucky to get away with a sniffle or two. While a lacklustre company reporting season and pessimistic Kiwi consumer didn’t help sentiment, stronger-than-expected economic growth in the fourth quarter of 2024 was a welcome bright spot.

Investors across the Tasman were similarly downbeat, particularly after Trump slapped a 25% tariff on Aussie steel. On the other hand, a softer-than-expected jobs market sparked hopes that the RBA could be persuaded to cut rates again, while new data indicated the economy picked up considerably at the end of last year.

Against this backdrop, the S&P 500 finished March down -5.8%, while the tech-focused Nasdaq slid -8.2%. The NZX 50 fell -2.6% over the month, while the ASX 200 lost -4.0%.

The UK’s FTSE 100 couldn’t maintain its recent resilience, falling -2.6% after the economy confounded expectations by shrinking in January. The Government subsequently announced large-scale cuts to public sector running costs and welfare spending.

GBP and AUD / NZD exchange rate change from 28 February 2025 to 31 March 2025:

  GBP and AUD / NZD exchange rate change from 31 March 2024 to 31 March 2025: